Power plan generates controversy

A proposed Quebec-NewYork City electricity line stirs the expected opponents and advocates, plus politics

Published 9:29 pm, Saturday, February 25, 2012

Photo: Cindy Schultz

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Donald Jessome, president and CEO of Transmission Developers Inc., holds a cross section of a high-voltage direct-current power cable Wednesday, Feb. 8, 2012, at Eric Mower & Assoc. in Albany, N.Y. Jessome's company wants to build a power line from Quebec to New York City that would be laid underground and underwater. (Cindy Schultz / Times Union) less

Donald Jessome, president and CEO of Transmission Developers Inc., sits near a cross section of a high-voltage direct-current power cable Wednesday, Feb. 8, 2012, at Eric Mower & Assoc. in Albany, N.Y. Jessome's company wants to build a power line from Quebec to New York City that would be laid underground and underwater. (Cindy Schultz / Times Union) less

Donald Jessome, president and CEO of Transmission Developers Inc., sits near a cross section of a high-voltage direct-current power cable Wednesday, Feb. 8, 2012, at Eric Mower & Assoc. in Albany, N.Y. ... more

Photo: Cindy Schultz

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Donald Jessome, president and CEO of Transmission Developers Inc., on Wednesday, Feb. 8, 2012, at Eric Mower & Assoc. in Albany, N.Y. Jessome's company wants to build a power line from Quebec to New York City that would be laid underground and underwater. (Cindy Schultz / Times Union) less

Donald Jessome, president and CEO of Transmission Developers Inc., on Wednesday, Feb. 8, 2012, at Eric Mower & Assoc. in Albany, N.Y. Jessome's company wants to build a power line from Quebec to New York City ... more

The proposed 333-mile transmission power line that would run under Lake Champlain and the Hudson River from Quebec to New York City will take much-needed electricity to the downstate market, and it will likely be cheap power generated by Canadian hydro plants, which would effectively lower electric rates for consumers across the state by $650 million a year.

"It's almost like putting a hydro facility right in New York City," says Jessome, who is CEO of Transmission Developers Inc., the Albany-based owner of the project.

But to others in New York, including power plant owners, upstate unions and some political leaders, justification of the line isn't that simple.

The critics include Gavin Donohue, CEO of the Independent Power Producers of New York, a trade group for the power plants. IPPNY opposes construction of the line for a number of reasons that are shared by unions representing workers in these plants, many of which are located upstate.

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These powerful unions and trade groups that make up New York's energy industry are upset because the Champlain Hudson line will not be connected to the rest of the state's electrical grid. If it were connected, the state's power plants could theoretically sell more electricity into the wholesale market with the added capacity.

But the project involves using what's known as a direct current line used in underwater power lines around the world — essentially a long extension cord from Canada plugged directly into the lucrative New York City market.

Upstate power plants won't benefit from this extension cord. And they see it as a slap in the face if regulators approve it. That's because the state's existing high-voltage transmission system is too old and in many places inadequate to carry all of the electricity from upstate power plants to the population centers downstate — a problem known as congestion.

And at a time when the state needs to be upgrading its own lines, it will allow someone else to bypass the problem. They see this as a threat to the open markets that were painstakingly created during deregulation in the late 1990s.

"It stifles competition and it will actually put a burden on ratepayers into the future," Donohue said.

But recent political moves make the project — which would pass through the Capital Region along CSX rail beds — even more intriguing. The 1,000 megawatts of power the line would take downstate — enough to power 2 million homes — could help offset the 2,000 megawatts of power that would be lost if the Indian Point nuclear power plant in Westchester County is forced to shut down.

Last month, Gov. Andrew Cuomo proposed $2 billion in transmission upgrades to relieve congestion bottlenecks in the system, the worst of which are between Utica and Albany and in Greene and Dutchess counties.

Those bottlenecks cause havoc with electric prices. When power cannot get from upstate plants to New York City and Long Island, electricity prices in those hard-to-get-to areas increase significantly. For instance, wholesale power sold in the western part of the state can cost $32 per megawatt hour at the same time it costs $39 a megawatt hour downstate.

Congestion also hurts the renewable energy market. Many wind farms are located in the North Country, and power is lost when it hits the transmission bottlenecks. That doesn't help the state in its quest to get 30 percent of its power from renewable energy by 2015.

Today, roughly 1 percent of the state's 1,275 megawatts of wind power is lost due to transmission constraints, but nearly 9 percent would be lost if the supply grows to 6,000 megawatts, according to a study by the New York Independent System Operator, the North Greenbush nonprofit organization that oversees the wholesale electricity market and reliability of the high-voltage transmission system.

And even though TDI sees a market for its $2 billion project because of high prices in New York City, Jessome says he welcomes Cuomo's plan — as long as it is financed by the private sector as the governor has said it would be, while the state oversees the process.

"It will be very interesting to see what this RFP (request-for-proposals) looks like," Jessome said. "There's room for many players, and that is what is needed."

A study of the Champlain Hudson project by London Economics International LLC, a Boston energy consulting firm, also found that the project would support hundreds of construction jobs, most of them union, in addition to 1,200 jobs during the three-year construction period from suppliers and other businesses along the route. The line would also add $150 million annually to the state's gross domestic product, according to the London Economics study.

But the unions do not agree that the Champlain Hudson Power Express is in the public's interest, which is one of the criteria the state Public Service Commission must consider in either approving or denying construction of the line. The project must also receive federal approvals.

Like Donohue of IPPNY, officials of International Brotherhood of Electrical Workers Local Union 97, which represents nearly 5,000 workers at utilities like National Grid and power plants, believe the line from Canada will have a chilling effect on investment in upstate power plants and new transmission lines.

Phil Wilcox, business representative for Local 97, said the Champlain Hudson line will "kill" incentives for future investment in the state's generation and transmission system by essentially ignoring — and compounding — the upstate congestion issue.

"Thousands of existing New York state jobs will be lost and thousands of potential new ones as well," Wilcox said.